Crane Tire Co. just paid an annual dividend of $1.70 on its common shares. If Crane is expected to increase its annual dividend by 5.10 percent per year into the foreseeable future and the current price of Crane’s common shares is $16.67, what is the cost of common stock for Crane? (Round intermediate calculations to 4 decimal places, e. g. 0.1555 and final answer to 2 decimal places, e. g. 15.25%.)

15.30 %

Explanation:

The cost of common stock for Crane is the return that is expected by holders of Common Stock.

The cost of common stock can be determined using the dividend growth model as follows :

cost of common stock = Next year`s dividend / Current Market Price + Expected Growth Rate

                                     =  $1.70/$16.67 + 0.0510

                                     =  15.30 %

x=3

step-by-step explanation:

this is really simple i saw that there was only one term (5x) and thought if that was 15 what would i have to multiply everything else to get it there? well if 5x became 15 then x would have to be 3 so plug the 3 in the x for the other equations and you get 15 for the other ones. so there you go. : )

answer$22,000 ;